World Bank reassured by Vietnam steps toward stability

HANOI, Dec 3 (Reuters) – It is “reassuring” to see Vietnam rebalancing its economic policy toward stability, but more turbulence could be on the cards as the global economy continues to recover, the World Bank said on Thursday.

Even as monetary policy tightens, inflation is likely to see some acceleration in Vietnam in 2010, it said in a semi-annual report.

“It is reassuring to see that the government is rebalancing its objectives once again, giving more priority to stability. The decisions made between late October and early December amount to an appropriate macroeconomic framework being put in place,” it said.

Vietnam’s macroeconomic management for the past two years has so far been effective, despite having a relatively “heterodox and at times rudimentary nature”, the Bank said in its report, entitled “Taking Stock”.

Vietnam had taken a series of small steps starting in October to begin to tighten monetary policy, capped by last week’s currency devaluation and interest rate hike. The government also announced this week an end to subsidies on short-term business loans, which has been a pillar of its stimulus package.

The moves were designed to address imbalances that emerged during roughly a year of expansionary monetary and fiscal policy to counter the global economic crisis, including chronic currency weakness spurred by dollar hoarding and expectations of depreciation. (Reporting by John Ruwitch; Editing by Muralikumar Anantharaman) ((john.ruwitch@thomsonreuters.com; +84 4 3825 9623; Reuters Messaging: john.ruwitch.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))

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Donors pledge $5 bln soft loans, grants to Vietnam

Vo Hong Phuc, Minister of Planning and Investment in Vietnam and Consultative Group co-chairman, left, listens as James W. Adams, vice president of the World Bank and Consultative Group co-chairman, right, speaks during closing session in Consultative Group Meeting in Hanoi, Vietnam, Friday, Dec. 5, 2008. (AP Photo/Chitose Suzuki)

Vo Hong Phuc, Minister of Planning and Investment in Vietnam and Consultative Group co-chairman, left, listens as James W. Adams, vice president of the World Bank and Consultative Group co-chairman, right, speaks during closing session in Consultative Group Meeting in Hanoi, Vietnam, Friday, Dec. 5, 2008. (AP Photo/Chitose Suzuki)

HANOI, Vietnam (AP) — International aid donors pledged $5 billion in low-interest loans and grants to Vietnam on Friday, with the total falling slightly from last year because Japan has frozen aid until the communist country takes effective measures to tackle corruption.

Last year, donors pledged $5.4 billion in official development assistance to booming Vietnam, which has recorded economic growth of at least 7 percent annually over the past decade.

On Thursday, Japan, which has provided more development aid than any other country to Vietnam, said it would make no new loans to Vietnam next year.

The announcement came after four Japanese executives pleaded guilty last month to paying $820,000 in bribes to a Vietnamese official overseeing a highway project in Ho Chi Minh City, the country’s southern commercial and financial hub.

Tokyo has said it would only resume providing aid to Vietnam when effective anti-corruption measures are in place.

Other donors also raised concern about corruption, as well as the recent arrests of two Vietnamese journalists.

“The events of the last six months have raised concerns with respect to whether the media is being encouraged to actively report on corruption within the government,” said James Adams, vice president of the World Bank.

Minister of Planning and Investment Vo Hong Phuc replied that the journalists “were arrested for breaching laws, not because they were fighting corruption.”

Phuc praised international donors for their support in the face of a deepening global economic downturn.

“In spite of difficult times and the financial crisis, most countries have increased their aid commitment to Vietnam,” Phuc said. “This reflects the donors’ support for the policies of the Vietnamese government.”

The World Bank became the largest aid donor, with a pledge of $1.66 billion, and the Asian Development Bank pledged $1.57 billion. The European Union will give $893 million.

Over the past three years, donors have pledged a total of $13.6 billion in development aid to Vietnam, of which over $6 billion has been spent, mostly on infrastructure projects, according to the government.

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Vietnam still slack on anti-graft: int’l donors

International donors are concerned there’s not enough being done to fight corruption in Vietnam, a meeting on anticorruption measures in Hanoi heard Friday.

The Counselor of the Dutch Embassy, Van Loosdrecht, said despite a turn around in anti-graft in the country the fight was mostly being targeted at corruption at the grassroots level.

Donors at the meeting said that Vietnam had established special legal institutions but was still not doing enough work to combat graft, while a Finish Embassy representative pointed out the potential conflict of interest of appointing provincial mayors as chairs of their anti-corruption steering committees.

In addition media agencies in Vietnam have limited access to information in order to combat corruption, international delegates said.

“In recent years, Vietnam has made progress… and there are now pockets of excellence within the state media.

But myriad problems persist which, if not tackled, will severely reduce the media’s ability to combat corruption,” former journalist and Senior International Consultant Catherine McKinley said.

She said these problems included: inconsistent and poorly implemented legislation, a shortage of financing options, outdated and poorly resourced training facilities.”

However, the Government Inspectorate Chief Tran Van Truyen said the assessment that anticorruption in Vietnam is slacking up is due to a lack of information.

He said the anti-corruption steering committees were conducting investigations more thoroughly, which was why they were handling fewer cases.

He stated that no one, no matter how high the position, was immune to investigation and the law.

Vietnam will soon list categories of classified information – with only national security-related documents to be kept secret, Truyen said.

The government is also focusing on intensifying asset disclosure, making information, policies and administrative procedures more transparent, and improving the media’s role in the fight, he noted.

East-West Highway corruption probe

The country’s international image has been damaged by the case of a Ho Chi Minh City official who allegedly received bribes from executives of Japan’s Pacific Consultants International (PCI), the office manager of the Central Anti-Corruption Steering Committee, Vu Tien Chien, told reporters on the sideline of the meeting.

Last week, HCMC authorities suspended Huynh Ngoc Si, deputy head of the Department of Transport and chief of the East-West Highway and HCMC Water Environment Project while they investigate claims made in a Tokyo court that Si had taken more than US$2 million in bribes from PCI in exchange for helping the firm win consulting contracts in the highway project.

The government is actively tackling the case in an unbiased manner according to Vietnamese and international laws, Chien said, adding that the Central Anti-Corruption Steering Committee is closely following the case.

World Bank warning

In related news the World Bank (WB) would stop lending money to Vietnam if it discovered any wrongdoings regarding official development assistance (ODA) funding, the acting Country Director of the World Bank in Vietnam, Martin Rama warned Friday at a press briefing about the Consultative Group Meeting slated for December 4-5 in Hanoi.

WB has committed to offer more assistance to Vietnam, Rama said.

Early this year, Vietnam was put on the list of five developing countries with low incomes which will annually receive WB preferential loans of $1.5 billion over the next three years, the WB country director said.

Reported by Bao Van

http://www.thanhniennews.com/politics/?catid=1&newsid=44149

World Bank lends Vietnam 60 mln dlrs to modernise central bank

A Vietnamese flag flutters next to giant advertisement billboard for ATM cards, in Hanoi

A Vietnamese flag flutters next to giant advertisement billboard for ATM cards, in Hanoi

HANOI (AFP) — The World Bank Friday said it was lending communist Vietnam 60 million dollars for a project to modernise its central bank with better training and technology.

The credit would help the State Bank of Vietnam and other institutions “to reform and modernise the financial sector by improving delivery of their main functions in line with international standards,” said the bank.

Much of the loan would be used “to build a modern, centralised information and communications technology platform to support the State Bank of Vietnam’s evolving role as a central bank,” the World Bank said in a statement.

The project would also help the Credit Information Centre and the Deposit Insurance of Vietnam with funding from the International Development Association, the Washington-based World Bank’s concessional arm.

“The project is aimed at contributing to the achievement of the government’s strategic goal of a stable and sound financial sector in Vietnam,” said Xiaofeng Hua of the World Bank’s East Asia and Pacific region.

“This effort is critical in ensuring Vietnam’s sustainable economic growth and continued progress in poverty reduction, especially at a time of global financial turbulence.”


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Vietnam Needs to Combat Industrial Pollutions says World Bank

June 30, 2008Industrialization is taking its toll on Vietnam’s environment and more funds should be dedicated to fighting pollution, the World Bank said in a study published on June 27. Between 1990 and 2005 Vietnam achieved an average annual growth rate of 7.5% in gross domestic product, driven largely by the industrial sector, but little was being done to protect the environment, the study said.

“There is a growing pressure on the government to raise public expenditure on pollution control and to force business to do the same,” the study said. “The cost to the economy of pollution, which is increasing in volume and toxicity, are becoming evident to the government and the public at large.”

Funds dedicated to fighting pollution gradually grew from 2000 to 2005, when it reached $600 million , But the bank said Vietnam needed about $2.5 billion  to adequately address the problem.

Five provinces or big cities, including the financial hub Ho Chi Minh City and capital Hanoi, are home to 63%  of manufacturing jobs and nearly 55% of the country’s industrial firms. “Industrial pollution is highly concentrated in certain areas of the country, and originates from a few manufacturing subsectors,” the study said.The manufacturing of chemical products and shoes were among the top polluters in the country, the bank said.

Copyright Agence France-Presse, 2008

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